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Business Law Assignment

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REPORT PRESENTING LEGAL POSITION OF DOMESTICS Ltd

Created by Legal Advisor, Domestics Ltd

Position examined regarding 3 following matters:

A) POTENTIAL CLAIMS

i) Relating to contract made with Raw Trade Ltd (supplier of raw materials) - a delivery has been made in breach of the contract, possibly resulting in losses of Ј50,000.

ii) Relating to contract of sale made with Bright Dealer Ltd (authorised dealer) - the dealer has failed to pay it's debt of Ј6000.

B) PROPOSED JOINT VENTURE

To manufacture refrigerated containers and trailers with Astra Ltd at new purpose built factory.

John Wright of the Board of Directors (lawyer also of Astra Ltd) is to sell own plot of land for sum of Ј1,000,000 for site of new factory.

Recommendation also included as to the type of business association which could be established most conveniently for this purpose.

The following headings identify points to be considered alongside the 3 matters above. Ongoing conclusions will also be presented.

TWO POTENTIAL CLAIMS

Differences between a Civil and Criminal Claim:

A crime may be defined as "a legal wrong for which the offender is liable to be prosecuted, and if convicted, punished by the State." Therefore a criminal claim is made "by the state on behalf of the general public".

In civil law, the state may provide the processes by which a dispute may be resolved but other than this has no direct involvement in the altercation. The dispute is between the individual parties only.

Civil law comprises of 6 main areas of law with which a director need be concerned:

* Law of Contract

* Law of Tort

* Commercial or Mercantile Law

* Company Law

* Employment Law

* Land Law

Due to their fundamental difference, the terminology used for each type of claim is also different...

General Term Criminal Claim Civil Claim

Person(s) starting the case Prosecutor Claimant/Plaintiff

To bring case against Charge, then prosecute Bring action against

Found guilty Convicted Liable

Found not guilty Acquitted Not liable

Another difference between these types of claim is the court systems. They are dealt with by different types of court with different jurisdiction:

Civil claim - County or High Court in first instance.

Criminal Claim - Magistrates or Crown Court in first instance.

(Both can later be referred to the Court of Appeal, House of Lords and the European court of Justice.)

The two claims which could potentially be made by Domestics Ltd are both civil claims. It is clear that in both cases, an agreement has been made which has then been breached - covered under Law of Contract. The nature of these contracts (which has not been outlined in the brief) is irrelevant, as the contract may be written, verbal or implied from conduct.

Courts in which the claims against Raw Trade Ltd and Bright Dealer Ltd should be filed:

The court in which a case is initiated is the "court of first instance". We have seen that to bring action against a party under the civil law system (regarding business matters), there are two courts concerned. These are:

* The County Court

* The High Court (Queen's Bench Division or sometimes Chancery Division)

The difference between the two is simple; the County court deals with less serious or lower value claims, and the high court with those of more importance/value. There are "cut off" claim values to define which claims are held in which courts, and these are illustrated below:

This diagram shows that there is an overlap where cases with a value of between Ј15,000 and Ј50,000 may be held in either court. Usually, these cases are heard in County Courts, but the essential factor is the complexity of the case. If the case falls within this value overlap yet is of an extremely complex nature, then it can be heard in a High court.

In addition to this, the "3 Track System" has also since been introduced. Established in 2000 by Lord Woolf, its aim was to create better efficiency within the legal system. As the name implies, there are 3 routes available to claimants depending on value:

1. Small Claims Track - For claims under Ј5000. Less time is apportioned to these cases and they are more informal.

2. Fast Track - For claims of between Ј5000 and Ј15,000. Costs are capped, the cases are heard during one day only, and a hearing must take place within 30 weeks.

3. Multi Track - Longer process for more complex cases (as previously.)

Potential Claim Against Raw Trade Ltd:

The value of Ј50,000 determines that this claim should be filed in the High Court in the first instance. The brief states that the breach of contract "may result in losses in excess of Ј50,000" indicating that the details of the wrong delivery are not clear (therefore possibly a more complex case) and that the amount lost could be even more than Ј50,000. This reinforces that it should be filed in the High Court, and it would qualify as "multi track".

Potential Claim Against Bright Dealer Ltd:

By its value, this claim would be filed in County Court. Unfortunately being in excess of Ј5000 prevents it from being eligible for the "small claims track" but it would be eligible for a "fast track" route. The case is not likely to be at all complex as a debt (assuming Domestics Ltd has an accurate set of accounts) should

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